Wednesday 23 May 2012

Parkson Holdings (PKS MK, BUY, FV RM5.51, Last price: RM4.69)


Parkson’s 9MFY12 results were below consensus and in line with our estimates. Revenue and net profit  jumped 18.4% and  8.4% y-o-y  to  RM2621.0m and RM298.4m respectively, mainly attributed to stronger revenue from the retailing as well as property/investment holding divisions. EBITDA margin was, however, crimped by  higher overhead and operating expenses.  Judging from the  softer numbers from  Parkson Retail Hong Kong, we  are  revising down our FY12 and FY13 forecasts. Maintain BUY with a lower FV of RM5.51.

Within estimates. The group’s 9MFY12 earnings were below consensus but within our estimates. Revenue and net profit  jumped 18.4% and 8.4% y-o-y  to  RM2621.0m and RM298.4m respectively.  The better performance was mainly contributed by  higher revenue from the retailing division (+18% y-o-y)  owing  to decent same-store-sales growth (SSS) across the regions,  the  inclusion of  the  Indonesian operation which  the group acquired in June 2011, and the robust sales performance of its new stores. SSS in China (+7%), Malaysia (+9.5%), Vietnam (+11.8%) and Indonesia (+9.8%) continued to be impressive and on track to meet management’s SSS guidance. The property and investment holding division generated RM12.5m of revenue from the management of its first local self-owned retail mall at KL Festival City. The mall has made good progress as the number of tenants has been increasing since it commenced business in Oct 2011. Q-o-q revenue and PBT only increased marginally by 0.8% and 4.1% respectively due to the early Chinese New Year this year, and slower regional growth, as its operations in China, Malaysia, and Vietnam experienced a lower number of sale promotion days.

Thinning margin. Merchandise gross margin improved slightly from 19.3% to 19.4% yo-y but  EBITDA margin was lower  at 30.8% as  higher staff costs and operating expenses took bite.  

Expansion plan.  By FY13, the group plans to increase the gross floor area (GFA) in China by 279k sq ft. There will be 1 new store in Malaysia, 2 in Vietnam, 2 in Indonesia and 1 in Cambodia in FY13, which will add a total of 89k sq ft of GFA in Southeast Asia.

Maintain BUY. Incorporating weaker contribution from Parkson Retail Hong Kong given the disappointing results, our FY12  and FY13 forecasts  are cut by 7.2% and 12.9% respectively. Our FV is revised down to RM5.51. Maintain BUY.

Source: OSK 

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